Atricure, Inc. · NASDAQ:ATRC
Atricure — Investor Presentation (January 2016)
37 slides from Atricure's investor presentation, Jan 11, 2016
Slide 1: AtriCure, Inc.
AtriCure AtriCure, Inc.
Slide 2: Forward Looking Statements/Non-GAAP Measures
Forward Looking Statements/Non-GAAP Measures This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that AtriCure expects, believ
Slide 3: AtriCure is uniquely positioned to address the growing, global Afib epidemic
AtriCure is uniquely positioned to address the growing, global Afib epidemic The only FDA-approved devices for surgical Afib ablation: 120,000+ cases in 800 US centers Large Underpenetrated Markets 15M A-Fib patients in developed countries; Estimated 25% penetrated in cardiac surgery patients Strong
Slide 4: Afib is debilitating and a rapidly growing epidemic
Let’s Start With A Simple Concept: Afib is debilitating and with an aging population it is a rapidly growing epidemic
Slide 5: Overview of Atrial Fibrillation
Overview of Atrial Fibrillation1-9 Afib Risks & Symptoms 5 - 6x higher risk of STROKE (2nd leading cause; due to LAA) May lead to Congestive Heart Failure 60-90% are symptomatic Chest pain, pressure, or discomfort (Angina) Shortness of breath (Dyspnea) Hypotension (Low blood pressure) Palpitations C
Slide 6: Afib Clinical Hierarchy
Afib Clinical Hierarchy10 Afib Patient Population Developed Countries ~15M Anti-arrhythmic drugs and/or anti-coagulants are effective ~50% or 7.5M + electrical cardioversion Anti-arrhythmic drugs and/or anti-coagulants are not effective ~50% or 7.5M Paroxysmal Afib (Intermittent) ~35% or 2.6M Persis
Slide 7: Two Distinct Procedure Types
Two Distinct Procedure Types PAROXYSMAL (INTERMITTENT) NON-PAROXYSMAL (CONTINOUS) OPEN (w/ heart surgery) PULMONARY VEIN ISOLATION (CLAMP or FUSION) COMPLETE MAZE ~25% Penetrated ~75% Remaining Market Opportunity STAND-ALONE (only operating on Afib) PULMONARY VEIN ISOLATION (CATHETER) HYBRID (SURGER
Slide 8: Non-Drug Options of Care For Non-Paroxysmal Afib
Non-Drug Options of Care For Non-Paroxysmal Afib Least Invasive/ Painful Therapy Acute Clinical Success Catheter Ablation (Endocardial) 30% single treatment Hybrid - CONVERGENT (Trans-Diaphragmatic) 70-80% on AADs 60-65% off AADs Hybrid - DEEP (Bi-Lateral Totally-Thoracoscopic) 80-90% on AADs 70-80%
Slide 9: What Does AtriCure Do?
What Does AtriCure Do? Provide solutions to treat Atrial Fibrillation (Afib) and resulting complications Large, underpenetrated market (33M people globally) Debilitating disease impacting quality of life Increases stroke risk AtriCure is the undisputed market leader Broad and deep product portfolio
Slide 10: Afib Solutions for Multiple Approaches
Afib Solutions for Multiple Approaches Open (w/cardiac surgry) Open Surgery MIS RF / Cryo Ablation, Sensing/Pacing, LAAM (AtriClip), Pain Management Totally-Thoracoscopic, Robotic RF / Cryo Ablation, Dissection, Sensing/Pacing, LAAM (AtriClip PRO), Pain Management Stand-Alone (only operating on Afib
Slide 11: Global Market Opportunity – Afib OPEN
Global Market Opportunity – Afib OPEN OPEN Ablation Estimated open heart surgeries per year 900,000 Estimated % that have Afib ~30% Estimated Afib patients undergoing surgery 270,000 Estimated Market Opportunity – Annual $770,000,000 Labeling advantage in U.S. Best products High gross margins Educat
Slide 12: Strong Underlying US Heart Surgery Market
Strong Underlying US Heart Surgery Market 11-12 CABG & AVR cardiac surgery will remain at steady state. MVR surgeries projected to grow dramatically. U.S. Annual Cardiac Surgery Procedures Isolated CABG AV Procedures MV Procedures Black Error Bars: projections from 3rd party market research firm 201
Slide 13: Afib MIS - Another $2B Market
Afib MIS - Another $2B Market MIS Ablation Estimated Afib patients 15,000,000 Estimated Persistent and Longstanding Persistent subset ~ 65% Subtotal 9,750,000 Estimated % drug refractory and symptomatic ~ 50% Subtotal - Patients 4,875,000 Estimated Market Opportunity – Total $42,000,000,000 Estimate
Slide 14: Global Market Opportunity – LAA OPEN (AtriClip)
Global Market Opportunity – LAA OPEN (AtriClip) OPEN LAA (AtriClip) Estimated Open heart surgeries per year 900,000 Estimated % that have Afib ~30% Estimated Afib patients undergoing surgery 270,000 Estimated Market Opportunity – Annual $275,000,000 Best in class LAA management Superior safety - No
Slide 15: Global Market Opportunity – LAA MIS (AtriClip PRO)
Global Market Opportunity – LAA MIS (AtriClip PRO) MIS Clip With MIS Ablation Estimated Afib patients 15,000,000 Estimated Persistent and Longstanding Persistent subset 65% Subtotal 9,750,000 Estimated % drug refractory and symptomatic 50% Subtotal - Patients 4,875,000 Estimated Market Opportunity –
Slide 16: Potential Market With FDA Trial – Sole Therapy LAAM
Potential Market … With FDA Trial Sole Therapy LAAM Market Estimate of treatment-resistant Afib patients 1,000,000 Estimated global revenue per device (all modes) $3,500 Estimated Market Opportunity – Total $3,500,000,000 Estimated % treated annually 10% Estimated Market Opportunity – Annual $350,00
Slide 17: Business Overview - Diversified and Growing Portfolio
Business Overview - Diversified and Growing Portfolio Focus Areas 2015 Revenue 2014 Revenue Global Market Size Keys to Success Trials OPEN Ablation (Concomitant) $53.6M U.S. +20% $44.7M U.S. +18% $770M Annually • FDA PMA label for Afib (2011) • Education and awareness • Conversions and add-on sales
Slide 18: ATRC Company Overview
ATRC Company Overview 450+ AtriCure employees globally and growing: Clinical: 10+ FTE’s, in-sourcing trial work R&D: 45+ FTE’s across multiple US offices Sales/Mkt: 100+ FTE’s incl. sales support, and training/education Intl: 30+ FTE’s covering EU, Japan, China, and LA Minneapolis, MN San Ramone, CA
Slide 19: Robust Infrastructure
Robust Infrastructure Sales/Marketing Highly experienced sales and marketing team (US and International) 100+ employees supporting ~60 US sales territories, EU subsidiary and 30 countries Well established International network of independent distributors International markets account for ~20% of tot
Slide 20: U.S. Commercial Sales Structure
U.S. Commercial Sales Structure 2012 Today 2016 VPs 1 2 + COO 2 + COO Area Directors 7 10 12 Regional Sales Manager (Territory) 36 50 58 Clinical Specialist 13 30 38 MIS Specialist 0 10 12 Total 57 103 123 Each Area Includes: (New zone is created beyond this) 5-6 Regional Sales Managers 3-5 Clinical
Slide 21: Financial Snapshot
Financial Snapshot Revenue and Gross Margin 2011 73.0% $64.4 2012 71.2% $70.2 2013 72.7% $81.9 2014 70.5% $107.5 2015E $129.8 2015 growth of 20.8% 2014 Total Revenue Growth: 31% 2014 US Growth: 29% 2014 OUS Growth: 39% Four Year CAGR of 16% Historical Gross Margins 70-73%, with expansion opportunity
Slide 22: AtriCure - Solid Growth History
AtriCure - Solid Growth History Q3 2012 8% WW Growth Q4 2012 10% WW Growth Q1 2013 11% WW Growth Q2 2013 12% WW Growth Q3 2013 24% WW Growth Q4 2013 18% WW Growth Q1 2014 27% WW Growth Q2 2014 29% WW Growth Q3 2014 33% WW Growth Q4 2014 37% WW Growth Q1 2015 24% WW Growth Q2 2015 27% WW Growth Q3 20
Slide 23: AtriCure - Solid Growth History
AtriCure - Solid Growth History Q3 2012 8% Q4 2012 10% Q1 2013 11% Q2 2013 12% Q3 2013 24% Q4 2013 18% Q1 2014 27% Q2 2014 29% Q3 2014 33% Q4 2014 37% Q1 2015 24% Q2 2015 27% Q3 2015 21 Q4 2015 24% 2014 = 31% growth Includes revenue from 12/31/13 Estech acquisition – organic revenue above 17% Notes:
Slide 24: AtriCure…Positioned for Success
AtriCure…Positioned for Success Strong Foundation Products, Approvals, Brand, Education Platform, Trials and Science, International + Strong Revenue Base and Momentum ~20% Revenue Growth in 2013, 2014, 2015 + Key Investments and Execution Stroke and DEEP Trial, Cease AF, ATLAS, Education, Product in
Slide 25: Market Summary 2015 Revenue
Market Summary 2015 Revenue Revenue – $129.8M (24% constant currency) (up from 9% in 2012, 17% in 2013 and ~20% organic in 2014) Open Ablation $770M+ market – 5+ years of strong growth Stand Alone Ablation $2B+ Market and trial key Clip $1B+ Market and growth accelerating Cryo A NEW $100M+ Pain-Mana
Slide 26: Thank You!
Thank You! _/ Your Partner " in Afib Solutions
Slide 27: References
References 1. Clinical Epidemiology 2014. 2. American Col of Card 2013. 3. Am J Card 2013, 112: 1142-1147. 4. Am J Card. Vol 87. June 1, 2001. 5. NIH Incidence Prevalence Chartbook 2006. 6. Circulation. 2006;114:119-125. 7. Kim M, et al. Circ Cardiovasc Qual Outcomes. 2011; 4:313-320 8. 2012 HRS/EHR
Slide 28: Appendix — Afib information
AtriCure’ Appendix — Afib information / Your Partner 7 in Afib Solutions
Slide 29: Atrial Fibrillation Overview
Atrial Fibrillation Overview Condition Overview · Abnormal electrical impulses cause the upper chambers of the heart to quiver at rapid rates of 400 to 600 BPM · Frequently associated with cardiovascular disease, in particular hypertension, congestive heart failure, coronary artery disease, etc. Eff
Slide 30: Afib Population: Large, Growing & Undertreated
Afib Population: Large, Growing & Undertreated Afib affects over 5 million in the U.S.(1) · U.S. prevalence projected to grow to 12-15 million by 2050 · International prevalence is comparable to the U.S. · Most common sustained cardiac arrhythmia(2) · Lifetime risk of Afib: ~1 in 4 for adults 40 ye
Slide 31: U.S. Afib Prevalence and Incidence Projections
U.S. Afib Prevalence and Incidence Projections 33M suffering from AF globally 15M suffering from AF in Developed Countries 6M+ suffering from AF in U.S. today 10M+ in 2025 Aging “Baby-boomers” Aggressive about healthcare 1.2M+ new U.S. patients diagnosed with AF annually Am Journal of Cardiology 2
Slide 32: Afib Increases Mortality
Afib Increases Mortality Davis RC, et al. Prevalence of atrial fibrillation in the general population and in high-risk groups: the ECHOES study. Europace. 2012;14:1553-1559.
Slide 33: Efficacy of Afib Ablation – Pivotal Trial
Efficacy of Afib Ablation – Pivotal Trial Prospective, multi-center, randomized trial of 55 patient with Persistent & LS Persistent Afib undergoing Cardiac Surgery
Slide 34: Efficacy of Afib Ablation – Mitral Valve
Efficacy of Afib Ablation – Mitral Valve Prospective, multi-center, randomized trial of 260 patients with Persistent & LS Persistent Afiv undergoing Mitral Valve Surgery w/ or w/o AF ablation
Slide 35: Treatment of Afib Patients in 2015
Treatment of Afib Patients in 2015 Treated Surgically Open Surgery & No Treatment Catheters Treated or Undertreated by Medication Failed Medication & Declined Surgery Paroxysmal AF (33%) - US 13,000 29,796 57,200 259,274 65,770 Non-Paroxysmal AF (67%) – US 13,000 26,505 52,800 526,406 244,250 1.2M A
Slide 36: Maze IV Procedure
Maze IV Procedure R& Coronary Artery Circumflex: Coronary Arkery n= Bipolar RF Clamp Surgical Incision © Optional eryo / RF pen — Bipolar RF Clamp and/or Cryo / RF Pen 36 AtriCure
Slide 37: DEEP Pivotal Study (CP2014-1)
DEEP Pivotal Study (CP2014-1) Study Objective: Establish the safety and effectiveness of a dual epicardial and endocardial ablation procedure for patients presenting with Persistent or Longstanding Persistent Atrial Fibrillation utilizing the AtriCure Bipolar System and AtriClip® PRO LAA Exclusion S